Downing Street rejects 'sleaze'

Downing Street was last night again forced to fend off allegations of political "sleaze" over Tony Blair's intervention in support of a bid by a wealthy Labour Party donor to buy a Romanian steel company.

Downing Street was last night again forced to fend off allegations of political "sleaze" over Tony Blair's intervention in support of a bid by a wealthy Labour Party donor to buy a Romanian steel company.

The Prime Minister's official spokesman said Mr Blair had been acting on the direct advice of the British ambassador when he wrote to his Romanian counterpart backing the successful bid by Indian tycoon Lakshmi Mittal.

The explanation failed to satisfy the Conservatives or Plaid Cymru - who first raised the case. They said that it left important questions unanswered.

Although Downing Street argued that Mr Blair had been acting in the "British interest", the opposition complained that Mr Mittal's international business empire has only tenuous links with the UK.

The Tories also sought to highlight the role played by the powerful Number 10 chief of staff Jonathan Powell - a political appointee brought into government by Mr Blair after Labour's 1997 election victory.

Mr Blair wrote to Romanian prime minister Adrian Nastase last July, supporting Mr Mittal's bid for the Sidex steel company, at the behest of the British ambassador in Bucharest, Richard Ralph.

Mr Mittal had given Labour #125,000 just the previous month. Mr Blair was unaware of the gift.